Amazon rallies 13% after-hours beating earnings with solid AWS growth

Amazon rallies 13% after-hours beating earnings with solid AWS growth
3 weeks ago
2 mins read

Amazon (NASDAQ: AMZN) stock rallied by over 13% in the after-hours trading session after investors digested the firm’s earnings guidance. Namely, the company managed to post revenues of $121.2 billion, a 7.2% year-on-year (YoY) increase, beating estimates by $2.04 billion. However, the earnings per share (EPS) were -$0.20, while the consensus was for an EPS of $0.12.

Despite Amazon missing the bottom line, sales are expected to grow between 13% and 17%, with operating income projected to be between $0 and $3.5 billion. Moreover, the highlight seemed to be the acceleration seen in the cloud business, AWS. Net sales grew from $14.8 billion in 2021 to $19.74 billion in the second quarter of 2022, marking a 33% gain YoY. 

Furthermore, the advertising side of the business rose by 18%, posting revenues of $8.76 billion. The downside on the bottom line was filled with impacts that steered the quarter towards a $2 billion loss or -$0.20 EPS. This is due to AMZN’s stake in Rivian Automotive (NASDAQ: RIVN), which included a charge of $3.9 billion. 

AMZN chart and analysis

Analyzing Amazon stock, a double bottom pattern was noted on the daily chart before the firm released its earnings; this pattern often signals a change in momentum, which occurred in the after-hours session. In the last month, AMZN has been trading between $102.52 and $137.57, with the short-term trend remaining positive. 

The recent move has moved the support line to $125.51 and the resistance to $139.56.

AMZN 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

TipRanks analysts have a ‘strong buy’ rating consensus, seeing the average price in the next 12 months reaching $171.67, 40.39% higher than the current trading price of $122.28.

Wall Street analysts’ price targets for AMZN. Source: TipRanks  

Despite the company’s headwinds with inflation and supply chain issues, Amazon still managed to post a solid quarter. Further development of macro trends will play a major role in fulfilling the growth prediction the management set out for the firm.

Long-term investors can be content with the showing so far in 2022, as it seems that AMZN is going from strength to strength.  

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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Dino Kurbegovic

Dino is an investor and technology enthusiast with years of experience in managing complex projects. At Finbold he covers stories on stocks, investing, micro and macroeconomic trends. Also, he’s also building a micro solar power plants in his hometown.